Home Pricing in San Diego has Become a Minefield
…particularly for home buyers and sellers in volatile real estate markets like San Diego, Las Vegas, Phoenix, Miami and other former hot spots. As real estate markets shift, the old comparable sales model for offers and pricing may no longer be quite so valid and could in fact be very dangerous to one’s financial health.
Should sellers overprice their homes based on prior sales that may have occurred many months ago they run the risk of having their homes go unsold. At the same time, if buyers use the same CMA tools to arrive at an offer, they run the risk of overpaying.
What we are beginning to see is more verbal interaction between San Diego real estate agents. We are verbally sharing information about properties and sales before that data ever hits the tax records. We share what we know about San Diego neighborhood short sales and foreclosures. This is information we can use to help guide our clients through these treacherous times. One who needs to sell a property cannot afford to deal with faulty dated information or an uninformed agent.
Relying on such information could result in a home that doesnt sell–or languishes on the market for months. Using the same outdated information, buyers run similar risks of potentially overpaying for a property or simply not knowing if a home is fairly priced in todays market.
Several thoughts for San Diego real estate buyers, sellers and agents:
1. Realtors need to be consultative in their approach with clients, and closely in touch with one another. As real estate professionals, we need to share with each other what is happening in area markets, in local markets, and in neighborhood markets. This is information our clients need.
2. Online valuation tools are perhaps even less valid than they were six months ago. Zillow and other online valuators (including our own) do a good job in reporting history via public records, but more current information is demanded. Old information can be deadly but that is all they have to report.
3. I am finding buyers more ready to purchase if they trust their Realtor is digging out the information that is truly needed to craft an offer. More agents are calling each other about pending sales, seeking pricing guidance for both buyers and sellers. This is good and serves our clients well.
Real Estate 2.0 may be all about online interactivity between clients, agents, lenders, stagers and other real estate service providers, but some old school tools come in handy as well. Key among those are gossip and whispers. If a seller in a neighborhood is capitulating in pricing, that is important information for both buying and selling clients. Tax records are useless in this circumstance, and so are the online valuation tools that use them.
It is difficult for all when real estate markets go about their periodic shifts. These are the times when knowledge, experience and sure footing are required of the real estate professional. And by the time the valuation software tools catch onto what is happening, the markets may be quietly shifting again.
We are already seeing signs of this in our San Diego real estate market. It is happening elsewhere as well.